Price rises anticipated in the new year

Homeowners have been told that they can expect to see the value of their properties increase in 2008.

Homeowners have been told that they can expect to see the value of their properties increase in 2008.

Spicerhaart has published its forecasts for the new year, detailing that it believes prices will increase by two per cent.

"The credit crunch does seem set to continue into 2008. This will produce a subdued environment characterised by low average price growth of around two per cent, although some areas, such as regeneration hotspots, will prove more buoyant," said Steve Cox from the firm.

"As affordability constraints are eased and demand continues to outstrip supply, the long term future is set to be bright and we expect the housing market to return to its previously higher levels by 2009," he added.

As well as the house price rises, Spicerhaart also believes that the Bank of England will announce two cuts to the base rate of interest in 2008.

"The Bank of England will need to drop interest rates to ease affordability constraints and stimulate the property market. We therefore predict two reductions of 0.25 per cent, with the first relatively early in the new year," continued Mr Cox.